NEW YORK, May 27 - Consumer confidence likely rose in May thanks to the end of fighting in Iraq, a rising stock market, and falling energy prices, a survey is expected to show on Tuesday. The Conference Board's monthly gauge of consumer confidence is forecast to rise to 84.9 in May from 81.0 in April. The report is due at 10 a.m. EDT (1400 GMT).
The rise would follow a similar increase from a survey by the University of Michigan, which earlier this month showed a sharper-than-expected rise in consumer sentiment. But many economists are not sure if higher confidence can be sustained given weakness in the job market.
Following is a selection of comments from economists at Wall Street firms.
ELISABETH DENISON, ECONOMIST, DRESDNER KLEINWORT WASSERSTEIN, NEW YORK
Forecast: 87.0 The end of the war with Iraq in April lifted optimism among consumers. The increase in the preliminary University of Michigan index released earlier this month suggests that increase carried over into May. It's mainly in the consumer expectations component of the index that optimism should increase. Current conditions are likely to remain low, since labor market conditions are still very sluggish.
With slowness in the job market, we expect consumer confidence to fade in the coming months. In the long run, the labor market determines consumer confidence.
RICHARD DEKASER, CHIEF ECONOMIST, NATIONAL CITY CORP., CLEVELAND
forecast: 84.7 The index should rise. The most important factor is post Iraqi war relief. If you looked at consumer confidence measures between last September and this March, the declines couldn't be fully explained by measures like unemployment, inflation, and stock prices. But as the war has faded, its downside risks to the economy have faded. Aside from that, we had an improvement in the stock market between April and May, and lower prices, mostly oil and energy related, which for the average American is unambiguously good news.
STEVEN WIETING, SENIOR ECONOMIST, CITIGROUP GLOBAL MARKETS, NEW YORK
Forecast: 93.0 We've seen a big rise in the competing consumer confidence surveys. A lot of other forecasts are for this index to be more or unchanged, but we forecast a solid move in the index, because it is the most volatile of the consumer confidence measures. There was an awful lot of fear that built up across the world as we went to war with Iraq. The worst case scenarios were terribly frightening. Not all the news out of Iraq was good, but the world did not come to an end. Now, energy costs are down, financial markets are a little improved, and consumer expectations should rise in this survey, bringing the index higher.//